Jan 22, 2013

Polysilicon Price Gains Most in 10 Months as Output Drops

Jan. 22 (Bloomberg) — The price of polysilicon rose 1.2
percent since the middle of December, the biggest gain in 10
months, as production fell and demand for solar panels that use
the raw material increased in the fourth quarter.

The average spot price for the material rose to $16.18 per
kilogram last week from $16.03 and $15.83 a month ago, Bloomberg
New Energy Finance’s latest survey shows. It was the third
weekly increase following an all-time low last month. The price
has dropped about 43 percent in the past year.

“The impact of reduced capacity utilization of polysilicon
producers is finally having a positive impact on the spot price,
which is still below production costs of most poly makers around
the world,” Martin Simonek, solar analyst at the research firm,
said by e-mail today. “Whether prices will continue to rise is
yet to be seen. Demand in the first half of 2013 remains
challenging.”

Producers led by GCL-Poly Energy Holdings Ltd. in China and
OCI Ltd. of South Korea stopped expanding factories last year
after a glut in the material depressed prices and gutted
margins. Most manufacturers cut output, and many small Chinese
makers halted production altogether.

Demand for solar panels rose strongly in the fourth quarter
of 2012, making solar stocks rise. Yet this is not what has
stabilized polysilicon prices, given they increase about eight
weeks before demand rises, according to Simonek.

Future prices are likely to be affected by China’s
preliminary ruling on an anti-dumping investigation on
polysilicon from the U.S., South Korea and the European Union,
which is scheduled for Feb. 20. The country’s panel and wafer
makers consume most of the world’s solar-grade polysilicon.

“In theory, retroactive tariffs there should push up the
material’s China price and lower the international one,”
Simonek said.

The average spot silicon prices in China and
internationally currently are $15.50 and $16.10 a kilogram,
respectively, BNEF data shows.

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